Chapter 16

Managing Human Resources

Learning outcomes • Define: human resources (HR)’ and ‘human resources management

(HRM)’

• Describe the HR strategy as business strategy

• Understand the role of culture, diversity, conflict and change in the working

environment

• Describe the recruitment and selection processes

• Differentiate between job analysis, job description and job

specification

Learning outcomes (cont.)

• Describe the recruitment and selection process

• Conduct a performance appraisal of your employees

• Identify changes and developments in HRM

• Assess the importance of using HR from outside the organisation

• Explain outsourcing and contracting as HR functions

Introduction • The nature of jobs and the working environment are

changing

• Jobs require now new types of knowledge workers

• There is a need for more awareness and appreciation of

different cultural backgrounds in the working environment

• There is a low supply of skilled and experienced labour

Human resources

• Include employees at all levels of an organisation

• Managerial and non-managerial

• Must be motivated, imaginative, qualified and

dedicated

Human resources concepts

and functions HRM comprises of:

• People in the organisation determine how successful other

means of production are

• A purposeful action of the HR department

• The HR function manifests itself as a HR department

Human resources functions • Job analysis and design

• Recruitment, selection, induction and internal staffing

• Appraisal, training and development, and career management

• Compensation and health

• Labour relations

• Human resource information systems (HRIS), HR research

and problem solving

Relationship of the HR strategy to the

business strategy

Employee management:

• Encourage a participative style of management

• Advantages of a participative management style include:

o Reduces complexity of growing business

o Generate new ways to address problems

o More prepared and motivated employees

o Employees enjoy added responsibility

The development of managerial and

professional employees

A management development program requires the

following factors:

• The need for development

• A plan for development

• A timetable for development

• Employee counselling

Culture

• Company culture: distinctive unwritten code of conduct that

governs behaviour, attitudes, relationships and style of an

organisation

Culture (cont.)

• Today’s organisational culture relies on certain principles:

o Respect for the quality of work and balance between work

life and home life

o A sense of purpose

o Diversity

o Integrity

o Participative management

o Learning environment

o A sense of fun

Diversity

• Managing diversity: establishing heterogeneous workforce

to perform to its potential in an equitable work environment

where no member has a dis/advantage

Diversity Reasons why diversity management is a dominant activity in HR

include:

• The shift from a manufacturing to a service economy

• Globalisation of markets

• New business strategies require more teamwork

• Mergers and alliances require different corporate cultures to work together

• A changing labour market

Conflict Conflict: actions of one group member prevent or obstruct the

actions of another person, or where there are different perceptions,

time horizons or lack of clarity of group goals

Five conflict-resolution techniques include:

1.Competing (win-lose)

2.Avoiding (lose-leave)

3.Compromising (win some, lose some)

4.Accommodating (yield-lose)

5.Problem-solving/collaborating (win-win)

Change leadership: An approach to follow

• Develop the need to change

• Develop a change vision

• Develop a communication

strategy

• Communicate the vision

• Get worker leaders informed

• Get the transformation team

together

• Conduct an organisational audit

• Decide on the change process

strategy

• Prepare both organisation and

stakeholders

• Implement the changes

• Remove any hindrances

• Mainstreaming the changes

• No plans/projects should be

cast in stone

Human resource provisioning

• Job analysis, job descriptions and job

specifications

• Recruitment and selection processes

Job analysis, job descriptions & job specifications

• Job analysis: process to determine duties and nature of jobs to be filled,

the skills and experience required of the people who fill them

• Job description: list of tasks, duties, activities, responsibilities, working

conditions and performance results required by a specific job

o Areas: reason the job exists; mental or physical tasks involved; how the job

will be done; qualifications needed

• Job specification: written statement of education, qualifications,

knowledge, skills, personal traits, abilities, attributes and characteristics

needed for a job

Recruitment and

selection processes

• Two Alternatives to consider when recruiting:

o Networking

o Social networking

Selection Steps to follow:

• Use an application form

• Interview the applicant

• Check references and background information

• Test the applicant

• Require physical examinations

Orientation

• Familiarisation with and adaptation to a situation or environment.

• Cues to proper behaviour come from sources such as:

o Official organisational literature of the organisation

o Examples set by or formal instructions given by senior staff

o Peer example

o Rewards and punishments that result from the employee’s efforts

o Responses to the employee’s ideas

o Degree of challenge in the assignments the employee receives

Developments in HR A changing work environment – changes include:

• 13th cheque replaced by performance incentives

• Across the board increases replaced by performance

based increases

• Reward for performance, not for tenure

Developments in HR (cont.) The use of performance appraisal systems

• Formal, systematic assessment of how well employees are

performing in their jobs in relation to established standards

Should be:

• Based on employee’s job description

Developments in HR (cont.)

Performance appraisals are based on the assumption that

employees have:

• Personal abilities and qualities that lead to job behaviours

that result in work performance that can be identified and

measured

Developments in HR - Balance scorecard

Management system to track organisational performance.

It incorporates performance measures from 4 balances

perspectives:

• Financial (return on capital employed)

• The customer (customer loyalty)

• The internal/business process (process quality and

process cycle time)

• Learning and grown (employee skills)

Balance scorecard (cont.) The balance scorecard emphases the importance of focusing on:

• Lagging indicators – what’s happened in the past

• Leading indicators – focus on the future

The HR Scorecard is a measurement system and a distinction is made

between:

• HRM “do-ables” (the enablers)

• HRM “deliverables” (the results that drive organisational

performance)

This process includes answering certain questions (refer to the textbook)

Developments in HR • Outsourcing: buy products and services from other

business firms – save money by buying from outside

suppliers that specialise in a particular type of work

• Contracting: contract services such as financial service

providers, marketing consultants and labour brokers

Future trends and implications for HR

1. A quality workforce – it entails:

• Employee morale

• Improving employee performance

The following are indicators of job dissatisfaction:

• Labour turnover; productivity; waste and scrap; product and service

quality; tardiness and absenteeism; accidents; complaints or grievances;

suggestions; exit interviews

Trends (cont.) Improving employee performance

Two control-related areas to employee morale are:

• Examine the pay/performance link

• Develop teamwork

Trends (cont.) 2. New competitive realities

The 19th and 20th centuries are dominated by the “Three C

Logic”:

• Command

• Control

• Compartmentalised information

Trends (cont.) Trends accelerate the shift toward new forms of organisations in 21st

century:

• Smaller companies that employ fewer people

• Shift from vertically integrated hierarchies to networks of specialists

• Decline of routine work, expansion of complex jobs

• Pay tied to person’s market value of skills

• Change in paradigm of doing business

• Outsourcing of activities

• Redefining work: constant learning, higher-order thinking